The Canadian owners of the Hilton Kingston say that the hotel is doing well, and that they plan to maintain the investment for several years. The investors - the Canadian Commercial Workers Industry Pension Plan (CCWIPP) - recently settled debt on the property to National Commercial Bank (NCB) and CIBC Bahamas - from mortgages it secured from RBTT Bank in Trinidad & Tobago.

Hilton... paid off NCB with mortage from RBTT

In that transaction, the Canadians paid out some US$10 million to NCB, one of the institutions from which they had secured the mortgage to purchase the hotel in 1998. On Monday, George Allen, an executive of the Canadian pension plan who oversees the investments in Jamaica, told the Business Observer that media reports claiming that the Hilton Kingston was not doing well were false.

"The Hilton Kingston is doing very well and we are very pleased with the operations... it is very well landscaped, and has good restaurants and operations," declared Allen. "We plan to be in Jamaica for quite a few more years, at which time our mortgage will be paid."

The Royal Bank of Trinidad and Tobago (RBTT) provided the investors with a loan to pay out the two existing mortgages. CIBC Bahamas which in 1998 provided the larger of the two mortgages later formed part of a merger between CIBC and Barclays that created FirstCaribbean International Bank in 2003.

The hotel which was the Wyndham at the time was actually owned by NCB.
On Monday, Allen suggested that securing the mortgage from RBTT to pay out the two creditors was an indication of the fact that the Jamaican investment remained bankable.
"We just managed to satisfy two mortgages on the Hilton Kingston, with a good Caribbean bank based in Trinidad - RBTT," he told the Business Observer.

Hilton's financial controller, David Anderson, declined to provide precise profit numbers, but pointed to data that he said indicated that the business was solid.

"For the year to date (up to September 2005), occupancy has been 70 per cent," said Anderson. "Over the last three years, in US dollar terms our revenue has increased by 20 per cent and operating profit has improved by 41 per cent over the same period. Our bottom line has been very healthy."

Allen confirmed that the mortgage payout which was announced two weeks ago, was in part due to mounting accrued interest, which became the focus of attention when the Canadian regulators - the Financial Services Commission of Ontario (FSCO) - began probing the pension plan at the beginning of 2005.
He stressed that everything was being done to comply with the regulations.

"It was accrued interest, and there were other factors, but we are doing our very best to be in compliance and we are cooperating with these very good regulators who care about the pension and the workers," said Allen.
Last week, the Business Observer reported that the pension plan was still being probed by the Canadian regulators over its real estate holdings in the Caribbean.

The FSCO has been probing to see whether following the pension fund may have violated two regulations set out under the federal law governing pension schemes in Canada.

These stipulate that no more than 10 per cent of the book value of a pension plan's assets be invested, directly or indirectly, in any two or more associated persons or affiliated corporations, and that no more than five per cent of the book value of a plan's assets be placed in any one parcel of real property.

Added Allen: "The regulators want us to invest mostly in Canada and if we go outside of Canada, only a very small percentage. We are doing everything we can to comply."

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